Pro
Understanding Market Caps and Flows
Key Insights
- Circulating market cap doesn’t account for future unlocks and emissions.
- In a bear market, emissions matter more heavily as they become a greater percent of daily trading volume.
- Tokens like Avalanche, Solana, and NEAR are more adversely affected by the bear market liquidity conditions because of their high emission ratios.
- BTC and ETH have near 1% inflation rates for the rest of 2022, yet still introduce $12 billion of new tokens that need to be absorbed.
- Without additional buyer inflows, token emissions will continue to take their toll on prices.
- The ratio of emission to trading volume can indicate when the bear market has reached equilibrium.
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Dustin was previously the Enterprise research director at Messari. He has a broad focus across crypto with a particular interest in AI x Crypto, Consumer financialization, DeFi, and general infrastructure.
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